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Climate change: Emissions target could cost UK £1tn, warns Hammond | Climate change: Emissions target could cost UK £1tn, warns Hammond |
(32 minutes later) | |
The chancellor has warned Theresa May that reducing greenhouse gas emissions to net zero by 2050 could cost the UK more than £1tn. | The chancellor has warned Theresa May that reducing greenhouse gas emissions to net zero by 2050 could cost the UK more than £1tn. |
The Financial Times reports that the PM wants to introduce the legislation to Parliament next week as "one of her most important legacies". | The Financial Times reports that the PM wants to introduce the legislation to Parliament next week as "one of her most important legacies". |
Philip Hammond has written to her, saying it would mean less money for schools, police and hospitals. | Philip Hammond has written to her, saying it would mean less money for schools, police and hospitals. |
The Committee on Climate Change recommended the target in May. | The Committee on Climate Change recommended the target in May. |
The BBC's assistant political editor Norman Smith said next week would see the first stage in the process of making this new target law - but any legislation would "have to wait until after Mrs May and after Brexit, so it could still be some time off". | The BBC's assistant political editor Norman Smith said next week would see the first stage in the process of making this new target law - but any legislation would "have to wait until after Mrs May and after Brexit, so it could still be some time off". |
Labour's shadow chancellor, John McDonnell, criticised his opposite number, saying: "We are facing a climate emergency and Philip Hammond clearly doesn't get it. | Labour's shadow chancellor, John McDonnell, criticised his opposite number, saying: "We are facing a climate emergency and Philip Hammond clearly doesn't get it. |
"The Tory party is way overdue in adopting a target already put forward by Labour, and now the chancellor is creating obstacles to prevent the action we desperately need to take." | "The Tory party is way overdue in adopting a target already put forward by Labour, and now the chancellor is creating obstacles to prevent the action we desperately need to take." |
The CCC, which is the independent adviser to government on climate change, put the cost at £50bn a year. | The CCC, which is the independent adviser to government on climate change, put the cost at £50bn a year. |
It said, while the UK would not be able to hit "net zero" emissions any sooner, 2050 was still an extremely significant goal. | It said, while the UK would not be able to hit "net zero" emissions any sooner, 2050 was still an extremely significant goal. |
According to the letter, seen by the FT, the Department for Business, Energy and Industrial Strategy believes it will cost more, estimating £70bn a year. | According to the letter, seen by the FT, the Department for Business, Energy and Industrial Strategy believes it will cost more, estimating £70bn a year. |
Mr Hammond said: "On the basis of these estimates, the total cost of transitioning to a zero-carbon economy is likely to be well in excess of £1tn." | Mr Hammond said: "On the basis of these estimates, the total cost of transitioning to a zero-carbon economy is likely to be well in excess of £1tn." |
The chancellor also warned the move could leave some industries "economically uncompetitive" - unless other countries the UK competes with follow suit. | The chancellor also warned the move could leave some industries "economically uncompetitive" - unless other countries the UK competes with follow suit. |
He said it was right for the UK to lead when it came to climate change, but the implications of pursuing the target needed to be "better understood". | He said it was right for the UK to lead when it came to climate change, but the implications of pursuing the target needed to be "better understood". |
'Got his sums wrong' | 'Got his sums wrong' |
But former Energy Secretary, and Liberal Democrat leadership contender, Ed Davey, said it was time to act on climate change. | But former Energy Secretary, and Liberal Democrat leadership contender, Ed Davey, said it was time to act on climate change. |
"[Mr] Hammond might be trying to reclaim his crown as a fiscal hawk in the dying embers of [Mrs] May's premiership, but this intervention is wrong headed and threatens our children's future," he said. | "[Mr] Hammond might be trying to reclaim his crown as a fiscal hawk in the dying embers of [Mrs] May's premiership, but this intervention is wrong headed and threatens our children's future," he said. |
"The cost of tackling the climate emergency is massively outweighed by the long term cost of not acting. The Chancellor has got his sums wrong." | "The cost of tackling the climate emergency is massively outweighed by the long term cost of not acting. The Chancellor has got his sums wrong." |
The potential political cost of the target | The potential political cost of the target |
Analysis by BBC assistant political editor Norman Smith | Analysis by BBC assistant political editor Norman Smith |
Philip Hammond is not opposed to ambitious energy targets, but it's clear he's worried about the cost - not just the financial cost, but also the potential political cost. | Philip Hammond is not opposed to ambitious energy targets, but it's clear he's worried about the cost - not just the financial cost, but also the potential political cost. |
And in Mr Hammond's view, there are hard choices to be made. | And in Mr Hammond's view, there are hard choices to be made. |
Encouraging consumers to change their habits and household appliances - like boilers - will come at a hefty price in terms of possible subsidies or tax incentives, and that will mean less cash for public services. | Encouraging consumers to change their habits and household appliances - like boilers - will come at a hefty price in terms of possible subsidies or tax incentives, and that will mean less cash for public services. |
There could also be a significant additional cost for business, particularly small firms, all of which is likely to prove politically fraught. | There could also be a significant additional cost for business, particularly small firms, all of which is likely to prove politically fraught. |
Of course, Mr Hammond won't be around to feel the political heat when these changes are introduced, but it's clear he thinks his successors at the Treasury need to start doing some serious work on the numbers. | Of course, Mr Hammond won't be around to feel the political heat when these changes are introduced, but it's clear he thinks his successors at the Treasury need to start doing some serious work on the numbers. |
Next week will be the first stage in the process when the government announces its intention to press ahead with the net zero target. | Next week will be the first stage in the process when the government announces its intention to press ahead with the net zero target. |
However, any legislation will have to wait until after Mrs May and after Brexit, so it could still be some time off. | However, any legislation will have to wait until after Mrs May and after Brexit, so it could still be some time off. |
The government's current target is to reduce emissions by 80% by 2050. | The government's current target is to reduce emissions by 80% by 2050. |
Mr Hammond said the UK was not on track to reach that goal, so to go further would need an "ambitious policy response". | Mr Hammond said the UK was not on track to reach that goal, so to go further would need an "ambitious policy response". |
But the CCC said England can eliminate emissions by 2050, while Scotland could go carbon-free sooner - by 2045. | But the CCC said England can eliminate emissions by 2050, while Scotland could go carbon-free sooner - by 2045. |
Wales can only cut 95% of its emissions by 2050 because of its farm industry, and Northern Ireland will follow England's targets. | Wales can only cut 95% of its emissions by 2050 because of its farm industry, and Northern Ireland will follow England's targets. |
The BBC's environment analyst, Roger Harrabin, said Scotland had exceptional potential for planting trees (which absorb carbon dioxide) and is more suited for carbon capture and storage. | The BBC's environment analyst, Roger Harrabin, said Scotland had exceptional potential for planting trees (which absorb carbon dioxide) and is more suited for carbon capture and storage. |
A No 10 spokesman said the government was committed to legislating to net zero and was responsible for commissioning the CCC's report. | A No 10 spokesman said the government was committed to legislating to net zero and was responsible for commissioning the CCC's report. |
He said it "strongly welcomed the recommendations" from the committee and it "remains our intention to make announcement on next steps as soon as we can". | He said it "strongly welcomed the recommendations" from the committee and it "remains our intention to make announcement on next steps as soon as we can". |
Analysis | |
By BBC Reality Check's Anthony Reuben | |
The Committee on Climate Change puts the cost of achieving net zero greenhouse gas emissions by 2050 at between 1% and 2% of GDP - the total output of the UK economy - a year. | |
GDP is currently about £2tn a year, so, at the moment, that amount would be between £20bn and £40bn. | |
The CCC reckons the cost will be about £50bn a year in 2050, but will be less in the early years of the transition. | |
Still, you can see how those figures could reach a total of £1tn over 30 years. | |
The letter also refers to a figure of £70bn a year from the Department for Business, Energy and Industrial Strategy - although the department has declined to comment on whether it has actually come up with that figure. | |
But these figures are only covering the cost - they do not include any possible benefits, creating new jobs in new industries, for example. | |
Although many environment groups are supportive of the move, many campaigners have complained the CCC target is too soft. | Although many environment groups are supportive of the move, many campaigners have complained the CCC target is too soft. |
The UK Health Alliance on Climate Change has called on the government to adopt the recommendations, but "adopt a net-zero target before 2050". | The UK Health Alliance on Climate Change has called on the government to adopt the recommendations, but "adopt a net-zero target before 2050". |
And Extinction Rebellion - the group which protested in and shut down parts of London in April - wants the government to hit the net zero target by 2025. | And Extinction Rebellion - the group which protested in and shut down parts of London in April - wants the government to hit the net zero target by 2025. |
Dr Doug Parr, Chief Scientist for Greenpeace UK, said Mr Hammond was putting "ideology before our wellbeing". | Dr Doug Parr, Chief Scientist for Greenpeace UK, said Mr Hammond was putting "ideology before our wellbeing". |
He added: "If you want to know whether a policy is a good idea, you include the benefits as well as the costs, and in this case the benefits include an economy fit for the 21st century, cleaner air, warmer homes and maximising the chances of civilisation surviving." | He added: "If you want to know whether a policy is a good idea, you include the benefits as well as the costs, and in this case the benefits include an economy fit for the 21st century, cleaner air, warmer homes and maximising the chances of civilisation surviving." |